In March 2016, Kunming Chuanjinnuo was listed on GME, becoming yet another newly listed phosphorus chemical company from Yunnan Province. Meanwhile, the company also planned to build projects which include facilities for the flotation of mid and low grade phosphorus ore and purification of wet-process phosphoric acid with raised capital. CCM believes that this will help the company save energy and reduce emissions as well as improve its industry chain.

Source: Baidu

On 15 March, 2016, Kunming Chuanjinnuo Chemical Co., Ltd. (Kunming Chuanjinnuo) was listed on the Growth Enterprises Market Board (GEM), also known as the Second-board Market, on the Shenzhen Stock Exchange, stock coded 300505.

On its first day of listing, Kunming Chuanjinnuo's stock price increased by as much as 44% and reached its limit up at USD2.26 (RMB14.76) per share as it attracted investments from all social circles by relying on the company's advantages, such as:

Core technologies, including the self-developed flotation and utilization of mid and low grade phosphorus ore and the purification of wet-process phosphoric acid

Ample sulphur, phosphorus, calcium and iron resources in Yunnan Province

An industrial model that integrates phosphoric acid with phosphate fertilizers and phosphate

Market shares in South and Southeast Asia

It is worth noting that before listing, Kunming Chuanjinnuo successfully raised a net capital of USD31.06 million (RMB203.07 million) by issuing 23.55 million public shares. The company claimed that all the raised capital would be invested into building projects which include facilities for the flotation of mid and low grade phosphorus ore and purification of wet-process phosphoric acid. 

Construction of these projects is predicted to last for two years and these projects are expected to contribute an annual revenue of USD101.76 million (RMB665.39million) and an after-tax profit of USD15.63 million (RMB102.19 million) to the company after reaching their designed capacities.

About Kunming Chuanjinnuo

Founded in 2005, Kunming Chuanjinnuo is focused on the graded utilization of wet-process phosphoric acid. Its main products include wet-process raw phosphoric acid, fertilizer grade calcium hydrophosphate, triple superphosphate, feed grade calcium hydrophosphate, feed grade calcium dihydrophosphate, etc.

 
New projects of Kunming Chuanjinnuo Chemical Co., Ltd., March 2016

Note: Out of the total investment, USD31.06 million (RMB203.07 million) was raised by issuing 23.55 million public shares.

Source: Kunming Chuanjinnuo Chemical Co., Ltd. & CCM

CCM believes that Kunming Chuanjinnuo's new projects will help the company save energy, reduce emissions and improve its industry chain for the following reasons:

Firstly, at present, most Chinese phosphorus chemical production bases adopt a thermal process to produce phosphoric acid, and this process is advantageous as it yields a high purity final product with few impurities.

However, the production of thermal-process phosphoric acid employs yellow phosphorus, which has low energy efficiency and is highly polluting, as a raw material, and deviates from the state's current guideline for the development of the industry. 

In addition, production costs of yellow phosphorus and thermal-process phosphoric acid are increasing as the price of ore climbs and the pressure from environment protection becomes heavier.

Under such circumstances, the development of wet-process phosphoric acid and break-through purification and extraction technologies have already become important research areas for the phosphorus chemical industry.

According to CCM's research, currently, the total annual output of wet-process phosphoric acid globally has surpassed 2.10 million tonnes, and accounts for 30% of the total of phosphoric acid. Specifically, in Europe, the US and Japan, the production of wet-process phosphoric acid  is more mature and the current proportion of wet-process phosphoric acid output to the total phosphoric acid output in these regions is 84%, 46% and 40% respectively.

Yet, in China, the production of wet-process phosphoric acid is still in the initial development stage and annual output only stands at about 200,000 tonnes. There is still huge room for development.

Secondly, Kunming Chuanjinnuo is located in the Northeast part of Yunnan Province which is rich in mid and low grade phosphorus ore resources. By building relevant projects, Kunming Chuanjinnuo will be able to enhance the utilization of local ore resources with its self-developed technologies.

In addition, its wet-process phosphoric acid project (which will produce 70% phosphoric acid with 22%-26% phosphorus ore) will, on one hand, alleviate the problems of high energy consumption and high pollution brought about by the production of thermal-process phosphoric acid, and realize energy savings and emissions reductions (60% reduction in energy consumption), and on the other hand, will provide a solid foundation (stable supply of raw material) for the company to develop downstream phosphorus chemical products and subsequently improve the company's ability to control production costs and the market competitiveness of its products.

Thirdly, relying on the newly built concentration and extraction equipment, Kunming Chuanjinnuo will be able to further process its existing wet-process phosphoric acid products, improving their concentration from 70% to 85% so that they meet the basic requirements of fine phosphorus chemicals. 

This also provides conditions under which the company can further extend its business to downstream industries. In addition to this, acid left over after extraction can be used to produce another product for the company, feed grade phosphate. In such a way, resources can be fully utilized and Kunming Chuanjinnuo can achieve maximum benefits from phosphoric acid.

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

Tag: phosphorus, Growth Enterprises Market Board

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